Bad news for associates? Report finds law firms are shifting to new 'talent model' for hiring
A shifting “law firm talent model” is bad news for associates, who make up a lesser proportion of lawyers in law firms than they did during the Great Recession, according to the "2025 Report on the State of the U.S. Legal Market." (Image from Shutterstock)
A shifting “law firm talent model” is bad news for associates, who make up a lesser proportion of lawyers in law firms than they did during the Great Recession, according to the 2025 Report on the State of the U.S. Legal Market.
“The composition of law firms is evolving, with a shift towards more experienced lateral hires, growth in two-tier partner structures, and a reduction in junior associate hiring,” according to the Jan. 7 report, which was produced by Thomson Reuters and the Center on Ethics and the Legal Profession at Georgetown Law.
Law firms have “reduced the pace” of associate hiring and the size of summer associate programs, reduced the ranks of equity partners and “ramped up” the numbers of nonequity partners, according to the press release.
The average proportion of associates was 40.2% in the time period from 2020 to 2024, down from 44.5% in 2005-2009. The proportion of equity partners in the more recent time period was 27.8%, down from 31.2% in 2005-2009, while the proportion of nonequity partners was 19.1%, up from 14.3%.
“Firms now seem to be returning to form” in hiring lateral lawyers and first-year associates, the report says, but “something else is happening” at law firms in the Am Law 50, a ranking of top law firms by revenue. Those upper-echelon law firms hired a 2024 associate class that was in line with lower-grossing firms, but in both 2024 and 2023 the Am Law 50 were “more aggressive in trimming headcount” than firms in other segments.
“While by no means destiny,” the report says, “other segments tend to follow the Am Law Top 50’s path, meaning what is today a unique strategy for the segment may become the primary strategy for the market in a few years’ time.”
The report also noted that law firms had a “surprisingly strong” 2024, with demand for legal services and billing rates that accelerated at the highest rate since the great financial crisis.
One reason for the big growth in rates may be that law firms are focusing less on new associates and more on experienced lateral lawyers.
“Thus, as firms become more top heavy with experienced associates and partners, the average rate charged by the firm moves upwards as well, inflating rate growth as a result,” the report said.
The report is based on financial data through November from 183 large and midsize law firms in the United States, according to a Reuters article on the report.
